Government Bonds Worldwide Are Getting Destroyed Today

Posted by Matthew Boesler - Business Insider

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Screen shot 2013-06-11 at 8.40.42 AM

The sell-off in government bonds has gone completely global as concerns over Federal Reserve tapering of monetary stimulus infect the market.

Everywhere this morning, bond yields are up huge as investors dump sovereign debt.

In the United States, the 10-year yield is up 6 basis points to 2.26%, its highest level in over a year.

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In the eurozone, French 10-year yields are up 5 basis points to 2.23%, Germany is up 3 basis points to 1.63%, Italy is up 15 basis points to 4.43%, and Spain is up 14 basis points to 4.471%.

Portuguese 10-year yields are up 37 basis points to 6.49%, and Greek yields are up 93 basis points to 10.28%.

Elsewhere in the developed world, the Japanese 10-year yield is up 5 basis points to 0.88%, Canada is up 5 basis points to 2.25%, Australia is up 11 basis points to 3.40%, and Switzerland is up 10 basis points to 0.84%.

Moving to emerging markets, Brazilian 10-year yields are up 14 basis points to 4.03% Mexico is up 14 basis points to 3.46%, Russia is up 15 basis points to 3.90%, and Turkey is up 31 basis points to 4.53%.

Treasuries and emerging market bonds have been selling off in recent sessions, but today, it definitely looks like the purge is accelerating.

Meanwhile, stocks are selling off globally as well. The Japanese Nikkei closed down 1.5% overnight following the latest Bank of Japan policy meeting.

In Europe, stocks have been heading lower all morning and most are trading near their lows of the day. Spain is down 2.7%, and Italy is down 1.7%. France is down 1.9%, and Germany is down 1.7%.

“Stocks across [Europe] are taking a shellacking to the tune of around 2% as rising German bund yields prompt accelerated losses for government bonds around the periphery,” says Miller Tabak Chief Economic Strategist Miller Tabak in an email this morning. “Yields on Spanish and Italian debt are rising to the highest in six weeks. The loss of last week’s lows for equity markets is all too much to bear in most cases and the resilient tone appears to have been snapped like a twig.”

Commodities are getting hit, too. WTI crude oil is down 1.3%, while Brent crude is down 1.5%, and NYMEX gasoline is down 1.3%., Gold is 1.2% lower, silver is down 1.5%, and platinum is down 1.3%. Agricultural commodities are all in the red with the exception of corn and soybeans, which are both flat.

In the United States, S&P 500 futures point to an open down 0.9%.

Meanwhile, the U.S. dollar is 1.9% lower against the Japanese yen, and the euro is down 0.1% against the dollar.